Chapter Five
How Ford Motor Credit Corporation Has Used Securitization
THIS CHAPTER illustrates how a company can use the securitization market to raise capital. A discussion of the Ford Motor Credit Corporation (FMCC) serves to explain the specifics of automobile loan securitization. After a description of FMCC’s basic business model, the securitization market is compared to the corporate debt market, especially as concerns credit rating and cost. Then we demonstrate how an entity that is designed to function with the sole purpose of funding a defined pool of financial assets or a flow of finance receivables known as a special-purpose vehicle (SPV) is positioned and capitalized to separate the credit rating of the corporation, in this case ...
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